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Notes to Accounts of V-Guard Industries Ltd.

Mar 31, 2015

1. Corporate information

V-Guard Industries Ltd ('V-Guard' or 'the Company') is a public company domiciled in India and is engaged in the manufacturing, trading and selling of a wide range of products including Voltage Stabilizers, PVC Cables, Pumps and Motors, Electric Water Heaters, Digital UPS, Fans, L.T.Cable, UPS, Solar Water Heaters, Switchgears, Induction Cooktops, etc.

V-Guard has its manufacturing facilities located at K.G. Chavady, Coimbatore, Tamil Nadu; at Kashipur, Utharakhand; at Kala Amb, Himachal Pradesh and at SIPCOT Industrial growth center, Perundurai, Tamil Nadu.

The Company's shares are listed in Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).

a) Basis of preparation

The financial statements of the Company have been prepared in accordance with the generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act, 2013 ('the Act'), read together with paragraph 7 of the Companies (Accounts) Rules 2014. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in the accounting policies explained below.

b) Share capital

Terms/rights attached to equity shares:

The Company has issued only one class of equity shares having a face value of Rs. 10 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended 31st March, 2015, the amount of per share dividend recommended for distribution to equity shareholders is Rs. 4.50 (31st March, 2014: Rs. 4.50).

In the event of liquidation of the Company, the equity share holders will be entitled to receive remaining assets of the Company, after settling the dues of preferential and other creditors as per priority. The distribution will be in proportion to the number of equity shares held by the shareholders.

2.Intangible assets under development

Intangible assets under development as at March 31, 2014 relates to computer software being developed for the Company.

3.Litigations, contingent liabilities and commitments (to the extent not provided for)

As at As at 31st March,2015 31st March,2014 (Rs. in lakhs) (Rs. in lakhs)

(i) Litigations (see note 1 below)

(a) Claims against the Company not 302.86 262.82 acknowledged as debt

(b) Direct tax matters under dispute / 340.74 158.39 pending before Income Tax Authorities

(c) Indirect tax matters for demands raised 645.98 144.10 by sales tax / vat department pending before various appellate authorities

(d) Others 6.82 6.82

Total 1,296.40 572.13

(ii) Contingent liabilities

(a) Guarantees (see note 2 below) 3,041.67 3,501.14

(b) Letters of credit opened with banks 2,012.49 1,915.34

Total 5,054.16 5,416.48

(iii) Commitments

(a) Estimated amount of contracts remaining 298.88 417.36 to be executed on capital account and not provided for.

Total 298.88 417.36

(1) The Company is involved in taxation and other disputes, lawsuits, proceedings etc. including commercial matters and claims relating to company's products that arise from time to time in the ordinary course of business. Management is of the view that such claims are not tenable and will not have any material adverse effect on the Company's financial position and results of operations.

(2) The Company has arranged Channel Finance Facilities for its customers from various banks. As per the terms of these facilities, should the customers default in making payment, after exhausting other modes of recovery the bankers have recourse on the Company which varies from 25% to 100% of the respective sanctioned limit as on the balance sheet date. Total amount guaranteed by the Company towards such recourses under the Channel Financing Facilities amounted to Rs. 2,717.26 lakhs as at 31st March 2015 (31st March, 2014: Rs. 3,227.49 lakhs) and is included under Guarantees above. The total trade receivables who have availed the facilities as at 31st March 2015 were Rs. 3,851.89 lakhs (31st March, 2014: Rs. 4,500.33 lakhs).

3.1 Disclosure as per clause 32 of the listing agreements with the stock exchanges

The Company has not given any loans and advances in the nature of loans to subsidiaries, associates or companies / firms in which directors are interested, and there are no investments in the shares of the Company by such parties.

4.Disclosures under accounting standards

4.1 Employee Benefit Plans

Defined Contribution Plan

The Company mainly makes Provident Fund (PF) and Employee's state insurance (ESI) contributions to a defined contribution plan for qualifying employees. Under the Scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company has recognised Rs. 380.04 lakhs (year ended 31st March, 2014: Rs. 335.29 lakhs) towards PF contributions (included in note 22(b)) and Rs. 47.81 lakhs (year ended 31st March, 2014: Rs. 73.70 lakhs) towards ESI contributions (included in note 22(b)) in the statement of profit and loss. The contributions payable to this plan by the Company is at the rate specified in the rules of the scheme.

4.2 Related Party Transactions (a) Details of Related Parties:

Description of Names of Related Parties Relationship

Mr.Kochouseph Chittilappilly - Chairman Mr. Mithun K. Chittilappilly - Managing Director and Son of Mr.Kochouseph Chittilappilly Mr. Ramachandran Venkataraman - Director Marketing and Strategy (w.e.f 1st June 2013) Key Management Personnel (KMP) Dr. George Sleeba - Joint Managing Director (upto 31st May 2013) Mr. Jacob Kuruvilla - Chief Financial Officer (Refer note 2 below) Ms. Jayasree K - Company Secretary (Refer note 2 below)

Relatives of KMP with whom Ms. Sheela Kochouseph - Wife of Mr. transactions have taken Kochouseph Chittilapilly place during the year Mr. Arun K. Chittilappilly - Son of Mr. Kochouseph Chittilappilly Mr. C. T. John - Brother of Mr. Kochouseph Chittilappilly

M/s. Wonderla Holidays Limited M/s. V-Star Creations Private Limited Company in which KMP / M/s. Veegaland Developers Private Limited Relatives of KMP can M/s. K Chittilapilly Foundation exercise significant M/s. Thomas Chittilapilly Trust influence

4.3 Employee Stock Compensation

The shareholders of the Company by way of a special resolution under Section 81(1)(A) of the Companies Act, 1956, passed on 14th May, 2013 through postal ballot procedure, approved Employees Stock Option Scheme, 2013 (ESOS 2013) for grant of stock options to eligible employees of the Company. The Compensation committee of the Company administers the scheme. According to the Scheme, the eligible employees will be entitled to options as given below subject to satisfaction of prescribed vesting conditions:

(a) 2,16,138 restricted stock units (RSU) (face value of Rs. 10 each) to be exercised at a grant price of Rs. 10 per share.

(b) 7,01,184 share options (face value of Rs. 10 each) to be exercised at a grant price of Rs. 485 per share.

These options will vest over a period of three years from June 2014 to May 2016. Of the total entitlements of 917,322 stock options (the total entitlements), as discussed above, two third of total entitlements are Time Based Grants whereby the eligible employee is vested with the options considering his continuing employment with the Company on the day of vesting. Remaining one third of the total entitlements are performance based whereby the employee will be vested with options considering the performance of the Company and the Individual employee.

Stock options under ESOS 2013 were granted on June 11,2013. Market price of the Company's equity shares at the date of the grant was Rs. 485.35 per share.

5. Previous year figures

Previous year figures have been regrouped / reclassified, whereever necessary, to conform to this year's classification.


Mar 31, 2014

1. Corporate information

V-Guard Industries Ltd (''V-Guard'' or ''the Company'') is a public company domiciled in India and is engaged in the manufacturing, trading and selling of a wide range of products including Voltage Stabilizers, PVC Cables, Pumps and Motors, Electric Water Heaters, Digital UPS, Fans, L.T. Cable, UPS, Solar Water Heaters, Switchgears, Induction Cooktops, etc.

V-Guard has its manufacturing facilities located at K.G. Chavady, Coimbatore, Tamil Nadu; at Kashipur, Utharakhand; at Kala Amb, Himachal Pradesh and at SIPCOT Industrial growth center, Perundurai, Tamil Nadu.

The Company''s shares are listed in Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).

2. Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956 read with General Circular 8/2014 dated April 4, 2014 issued by the Ministry of Corporate Affairs. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

Note 3 (A) : Intangible assets under development

Intangible assets under development as at March 31, 2014 and as at March 31, 2013 relates to a computer software being developed for the Company.

(Rs. in lakhs)

As at As at

Particulars 31st March, 2014 31st March, 2013

4.1 Contingent liabilities and commitments (to the extent not provided for)

(i) Contingent liabilities

(a) Claims against the Company not 262.82 8.82 acknowledged as debt

(b) Guarantees (see Note 2 below) 3,501.14 1,050.00

(c) Direct tax matters under dispute / pending 158.39 149.99 before Commissioner of Income Tax

(d) Indirect tax matters for demands raised by 144.10 160.08 sales tax / VAT department pending before various appellate authorities

(e) Letters of credit opened with banks 1,915.34 2,126.56

(f) Others 6.82 6.82

Total 5,988.61 3502.27

(ii) Commitments

(a) Estimated amount of contracts remaining to be 417.36 1,288.57

executed on capital account and not provided for:

Total 417.36 1,288.57

(1) The Company is involved in taxation and other disputes, lawsuits, proceedings etc. including commercial matters that arise from time to time in the ordinary course of business. Management is of the view that such claims are not tenable and will not have any material adverse effect on the Company''s financial position and results of operations.

(2) The Company has arranged Channel Finance Facilities for its customers from various banks. As per the terms of these facilities, should the customers default in making payment, after exhausting other modes of recovery the bankers have recourse on the Company which varies from 25% to 100% of the respective sanctioned limit as on the balance sheet date. Total amount guaranteed by the Company towards such recourses under the Channel Financing Facilities amounted to Rs. 3,227.49 lakhs as at 31st March 2014 (31st March, 2013 - Rs. 1,050 lakhs) and is included under Guarantees above. The total trade receivables who have availed the facilities as at 31st March 2014 were Rs. 4,500.33 lakhs (31st March, 2013 - Rs. 2,022 lakhs).

4.2 Disclosure as per clause 32 of the listing agreements with the stock exchanges

The Company has not given any loans and advances in the nature of loans to subsidiaries, associates or others, and there are no investments in the shares of the Company by such parties.

4.3 Foreign exchange forward contracts and unhedged foreign currency exposures Details on hedged foreign currency exposures

5.1 Employee Benefit Plans

Defined Contribution Plan

The Company mainly makes Provident Fund (PF) and Employee''s state insurance (ESI) contributions to a defined contribution plan for qualifying employees. Under the Scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company has recognised Rs. 335.29 lakhs (year ended 31 March, 2013: Rs. 237.11 lakhs) towards PF contributions (included in note 22(b)) and Rs. 73.70 lakhs (year ended 31st March, 2013: Rs. 75.17 lakhs) towards ESI contributions (included in note 22(e)) in the statement of profit and loss. The contributions payable to this plan by the Company is at the rate specified in the rules of the scheme.

Defined Benefit Plan - Gratuity

The following table sets out the funded status of the gratuity scheme and the amount recognised in the financial statements:

The discount rate is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligations.

The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors.

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

The plan assets are maintained with Life Insurance Corporation of India (LIC).

5.2 Segment Information

The Company has identified business segments as its primary segment and geographic segments as its secondary segment. Business segments are primarily (a) Electronic Products, (b) Electrical / Electro Mechanical Products and (c) Others. Revenues and expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly identifiable to each reportable segment have been allocated on the basis of associated revenues of the segment. All other expenses which are not attributable or allocable to segments have been disclosed as unallocable expenses. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as unallocable. Fixed assets that are used interchangeably amongst segments are not allocated to primary and secondary segments.

5.3 Employee Stock Compensation

The shareholders of the Company by way of a special resolution under Section 81(1)(A) of the Companies Act, 1956, passed on 14th May, 2013 through postal ballot procedure, approved Employees Stock Option Scheme, 2013 (ESOS 2013) for grant of stock options to eligible employees of the Company. The Compensation committee of the Company administers the scheme. According to the Scheme, the eligible employees will be entitled to options as given below subject to satisfaction of prescribed vesting conditions;

(a) 2,16,138 restricted stock units (RSU) (face value of Rs. 10 each) to be exercised at a grant price of Rs. 10 per share.

(b) 7,01,184 share options (face value of Rs. 10 each) to be exercised at a grant price of Rs. 485 per share.

These options will vest over a period of three years from June 2014 to May 2016. Of the total entitlements of 917,322 stock options (the total entitlements), as discussed above, two third of total entitlements are Time Based Grants whereby the eligible employee is vested with the options considering his continuing employment with the Company on the day of vesting. Remaining one third of the total entitlements are performance based whereby the employee will be vested with options considering the performance of the Company and the Individual employee.

Stock options under ESOS 2013 were granted on June 11, 2013. Market price of the Company''s equity shares at the date of the grant was Rs. 485.35 per share.

6 Previous year figures

Previous year figures have been regrouped / reclassified, wherever necessary, to conform to this year''s classification.


Mar 31, 2013

1. Corporate information

V-Guard Industries Ltd (''V-Guard'' or ''the Company'') is a public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The Company is engaged in the manufacturing, trading and selling of a wide range of products including voltage stabilizers, PVC Cables, Pumps and Motors, Electric Water Heaters, Digital UPS, Fans, L.T.Cable, UPS, Solar Water Heaters, Switchgears and Induction Cooktops.

V-Guard has its manufacturing facilities located at K.G. Chavady, Coimbatore, Tamil Nadu; at Kashipur, Utharakhand; at Kala Amb, Himachal Pradesh and at SIPCOT Industrial growth center, Perundurai, Tamil Nadu.

The Company''s shares are listed in Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).

2. Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

3.1 Disclosures required under section 22 of the Micro, Small and Medium Enterprises Development Act, 2006

As at March 31, 2013, Trade payables include Rs. 1,658.91 lakhs (March 31, 2012 - Rs. 1001.75 lakhs), towards principal amount payable to suppliers as defined under Micro, Small, Medium Enterprises Development Act, 2006 (MSMED Act). Interest due on the above as at March 31, 2013 is Rs. 0.17 lakhs.

The amount of interest paid by the Company in terms of section 16 of the MSMED Act 2006 along with the amounts of the payment made to the supplier beyond the appointed day was Rs. Nil for the year ended March 31, 2013. The amount of interest due and payable for the period of delay for payments made to suppliers during the year ended March 31, 2013 amounts to Rs. 10.36 lakhs. The amount of interest accrued and remaining unpaid as at March 31, 2013 amounts to Rs. Nil. The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid for the purpose of disallowance as a deductible expenditure under section 23 of the MSMED Act 2006 is Rs. Nil for year ended March 31, 2013.

Note: Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the management.

3.2 Disclosure as per clause 32 of the listing agreements with the stock exchanges

The Company has not given any loans and advances in the nature of loans to subsidiaries, associates or others, and there are no investments in the shares of the Company by such parties.

4.1 Employee Benefit Plans

Defined Contribution Plan - Provident Fund

The Company makes Provident Fund contributions to a defined contribution plan for qualifying employees. Under the Scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company has recognised Rs. 237.11 lakhs (Year ended 31 March, 2012: Rs. 193.44 lakhs) towards Provident Fund contributions in the statement of profit and loss. The contribution payable to this plan by the Company is at the rate specified in the rules of the scheme.

4.2 Details of capitalisation of expenditure

During the year, the Company has capitalised the following expenses of revenue nature to capital work-in- progress. Consequently, expenses disclosed under the respective notes are net of amounts capitalised by the Company.

4.3 Segment Information

The Company has identified business segments as its primary segment and geographic segments as its secondary segment. Business segments are primarily (a) Electronic Products, (b) Electrical / Electro Mechanical Products and (c) Others. Revenues and expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly identifiable to each reportable segment have been allocated on the basis of associated revenues of the segment. All other expenses which are not attributable or allocable to segments have been disclosed as unallocable expenses. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as unallocable. Fixed assets that are used interchangeably amongst segments are not allocated to primary and secondary segments.

5 Previous year figures

Prior year financial statements were audited by a firm other than S.R. Batliboi & Associates LLP. Prior year figures have been regrouped / reclassified, wherever necessary, to confirm to current year''s classification.


Mar 31, 2012

1 Corporate information

V-Guard Industries Ltd ('V-Guard' or 'the Company') is a leading corporation in the Indian electric and electronic goods panorama. V-Guard which started in 1977 as a Stabilizer manufacturer, now has a wide range of products including PVC Cables, Pumps & Motors, Electric Water Heaters, Digital UPS, Fans, L.T.Cable, UPS, Solar Water Heaters, Switchgears and Induction Cook tops.

V-Guard has state of the art manufacturing facilities at K.G.Chavady, Coimbatore, Tamil Nadu (manufacturing PVC cables, LT cables & Solar water heaters) at Kashipur, Utharakhand (manufacturing PVC cables) at Kala Amb, Himachal Pradesh (manufacturing Fans & Electric Water Heaters) and at Coimbatore, Tamil Nadu (manufacturing Pumps & Motors).A new factory for manufacturing Solar Water Heaters with improved technology is also coming up at SIPCOT Industrial growth centre, Perundurai, near Erode, Tamil Nadu. Apart from self manufactured goods which forms about 40 % of total turnover, V-Guard also trade in imported goods and goods procured from various production units in India.

V-Guard now has pan India presence with 28 branches, an extensive network of about 200 distributors / service centre's, 2700 channel partners and over 10000 dealers. V-Guard's untiring commitment for performance, cutting edge technology, innovative design and dependable service standards have ensured unrivalled product quality leading to its trusted brand image. The Company's shares are listed in the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

(i) Rights attached to equity shares:

The Company has issued only one class of equity shares having a face value of Rs 10 per share. Each holder of equity share is entitled to one vote per share. The company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended 31st March 2012, the amount of per share dividend recommended for distribution to equity shareholders is Rs 3.50 (31st March 2011: Rs 3.50).

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the company, after settling the dues of preferential and other creditors as per priority. The distribution will be in proportion to the number of equity shares held by the shareholders.

For the For the year ended year ended Note Particulars 31st March, 31st March, 2012 2011

2.1 Contingent liabilities and commitments (to the extent not provided for)

(i) Contingent liabilities

(a) Claims against the Company not acknowledged as debt 9.05 7.05

(b) Guarantees 153.75 -

(c) Other money for which the Company is contingently liable 681.38 759.48

844.18 766.53

(ii) Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for:

Tangible assets 182.62 1,572.12

182.62 1,572.12



2.2 Disclosure as per Clause 32 of the Listing Agreements with the Stock Exchanges

The Company has not given any loans and advances in the nature of loans to subsidiaries, associates or others, and there are no investments in the shares of the Company by such parties.

2.3 The Company has deposited the dividends payable to non-resident shareholders into their Rupee account with various banks in India and hence the disclosure of amounts remitted in foreign currency during the year to non-resident shareholders on account of dividend is not applicable.

3.1 Employee Benefit Plans

Defined Contribution Plan - Provident Fund

The Company makes Provident Fund contributions to a defined contribution plan for qualifying employees. Under the Scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company has recognized Rs 193.44 lakhs (Year ended 31st March, 2011: Rs 153.38 lakhs) towards Provident Fund contributions in the Statement of Profit and Loss. The contribution payable to this plan by the Company is at the rate specified in the rules of the scheme.

The discount rate is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligations.

The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors.

The discount rate is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligations.

The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors.

3.2 Segment Information

The Company has identified business segments as its primary segment and geographic segments as its secondary segment. Business segments are primarily (a) Electronic Products, (b) Electrical / Electro Mechanical Products and (c) Others. Revenues and expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly identifiable to each reportable segment have been allocated on the basis of associated revenues of the segment. All other expenses which are not attributable or allocable to segments have been disclosed as unallowable expenses. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as unallowable. Fixed assets that are used interchangeably amongst segments are not allocated to primary and secondary segments. Company's operations are situated predominantly in one geographical area, viz., India, and hence secondary Geographical segment information is not applicable.

4 The Revised Schedule VI has become effective from 1 April, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.


Mar 31, 2011

1. Particulars of Security provided for loans are as under: - Term Loans from Banks:

a) Term loan of Rs.370 lakhs from Dhanlaxmi Bank Ltd. is secured by hypothecation by way of (1) first charge on the plant and machinery, tools and accessories in respect of specific assets financed by the bank, namely (a) 2 x 230 KW Wind Mills situated at Dharapuram Taluk, Erode, Tamil Nadu, (b) Machinery and equipment in respect of Solar Water Heater Unit at K.G Chavadi, Coimbatore; and (c) Office cum godown building at Mansoorabad Village, Renga Reddy District, Andhra Pradesh; and (2) equitable mortgage of 4 acres of land relating to the Wind Mills, at Erode, Tamil Nadu and 2091.5 sq. meters of land at Mansoorabad Village in Andhra Pradesh.

b) Term loan of Rs.100 lakhs from Dhanlaxmi Bank Ltd. is secured by way of equitable mortgage of 106.424 cents of land at Edappally South Village, Kanayannur Taluk, Vennala Desom, together with godown with an area of 1578.40 sq meters.

c) Term loan of Rs.1,000 lakhs from State Bank of India is secured by way of (a) charge over the registered Trade Mark "V-GUARD"; and (b) exclusive charge over (i) Plant and Machinery in the trading division having establishments at Ernakulam, Bangalore, Coimbatore and Hyderabad; (ii) Factory building and plant and machinery at Solar Water Heater Division; (iii) 113.293 cents of land at High School Road, Vennala; (iv) 1306 cents of land at K.G Chavadi, Coimbatore; and (v) 12.52 cents of land at Mettupalayam Road, Coimbatore. Balance outstanding in this facility as on 31.03.2011 is Rs. Nil (Previous Year: Rs.120 lakhs).

d) Term loan of Rs.800 lakhs from State Bank of India is secured by way of (a) charge over the assets acquired / constructed out of bank finance, viz., corporate office building at Vennala; (b) extension of equitable mortgage over 113.293 cents of land at High School Road, Vennala, 1306 cents of land at K.G Chavadi, Coimbatore, 12.52 cents of land at Mettupalayam Road, Coimbatore, and (c) extension of charge over Plant and Machinery in Trading Division and Solar Water Heater Division and factory building of Solar Water Heater Division. The loan is further secured by personal guarantees of Sri. Kochouseph Chittilappilly, Managing Director and Smt. Sheela Kochouseph, wife of Sri. Kochouseph Chittilappilly.

e) Term loan of Rs.200 Lakhs from Punjab National Bank is secured by way of mortgage of 622.50 Cents of land at Survey No.37/2, 37/3 and 37/4 together with godown building at Thenkurissi Village near NH-47 Junction, Palakkad. Balance outstanding in this facility as on 31.03.2011 is Rs. Nil (Previous Year: Rs. Nil).

Medium Term Loans from Banks:

Medium term loans from Dhanlaxmi Bank Ltd. and HDFC Bank Ltd. are secured by way of hypothecation of vehicles financed by the lender.

Medium Term Loans from Others:

Medium term loan from Cisco Systems Capital India Pvt. Ltd. is secured by way of hypothecation of fixed assets financed by the lender.

Working Capital Loans from Banks:

Working capital loans from State Bank of India, Dhanlaxmi Bank Ltd., Citibank N.A., HDFC Bank Limited and Standard Chartered Bank are secured by hypothecation by way of pari passu first charge on all current assets of the Company, both present and future, including stock of goods, book debts and all other movable assets including document of title to goods and third pari-passu charge on all fixed assets of the Company including immovable properties.

2. Company has availed supplier bill-discounting facilities from Small Industries Development Bank of India (SIDBI), State Bank of India, Standard Chartered Bank and Dhanlaxmi Bank Ltd. The security details of these facilities are as follows:

a) The limit with SIDBI is secured by a second charge by way of hypothecation of all the movable assets including movable plant, machinery, spares, tools, accessories, equipments, computers etc., both present and future, of the Company and personal guarantee of Shri Kochouseph Chittilappilly, Managing Director of the Company.

b) The limits with State Bank of India, Standard Chartered Bank and Dhanlaxmi Bank Ltd. are secured by way of extension of security provided for working capital loans.

3. Contingent Liabilities:

(Rs. in lakhs)

Particulars 2010-11 2009-10

(a) Disputed sales tax matters, pending in appeal 127.62 125.35

(b) Claims against the Company not acknowledged as debts 7.05 -

(c) Disputed income tax matters, pending in appeal 4.53 -

(d) Open letters of credit for import / inland purchases 627.33 343.72

4. Estimated amount of contracts remaining to be executed on capital amount and not provided for (net of advances): Rs.1,572.12 lakhs. (Previous Year: Rs.343.96 lakhs).

Note: The Ministry of Corporate Affairs, Government of India, vide Notification No. S.O. 301(E) dated 8th February 2011, has exempted manufacturing / multi-product companies from disclosing particulars of goods which form less than 10% of the total value of turnover under clauses 3(i)(a) and 3(ii)(a) of Part II of Schedule VI of the Companies Act, 1956. The Company has accordingly disclosed quantitative particulars of goods which constitute 10% or more of the turnover for the current year and / or previous year.

(b) Particulars in respect of Opening Stock, Purchases and Closing Stock of Traded Goods

Note: The Ministry of Corporate Affairs, Government of India, vide Notification No. S.O. 301(E) dated 8th February 2011, has exempted trading / multi-product companies from disclosing particulars of goods which form less than 10% of the total purchase under clauses 3(i)(a) and 3(ii)(b) of Part II of Schedule VI of the Companies Act, 1956. The Company has accordingly disclosed quantitative particulars of goods which constitute 10% or more of the total purchases for the current year and / or previous year.

Note: The Ministry of Corporate Affairs, Government of India, vide Notification No. S.O. 301(E) dated 8th February 2011, has exempted manufacturing / multi-product companies from disclosing particulars of goods which form less than 10% of the value of raw material consumption under clause 3(ii)(a) of Part II of Schedule VI of the Companies Act, 1956. The Company has accordingly disclosed quantitative particulars of goods which constitute 10% or more of the value of raw materials consumed during the current year and / or previous year.

- Perquisites have been valued in accordance with the Income Tax Rules, 1962.

- The above remuneration is within the limits specified u/s 198 of the Companies Act, 1956.

- Provisions for / contributions to employee retirement benefits, which are based on actuarial valuations done for the Company as a whole, are excluded from the above.

5. Notes on Cash Flow Statement:

a) The Cash Flow Statement has been prepared under the 'indirect method' specified in Accounting Standard – 3 "Cash Flow Statements" notified under Companies (Accounting Standards) Rules, 2006.

b) Cash and Cash Equivalents includes (a) fixed deposits of Rs.207.05 lakhs (Previous Year: Rs. 85.25 lakhs), given as security for guarantee and letter of credit facility extended by State Bank of India and Dhanlaxmi Bank Ltd.; and (b) unclaimed dividends amounting to Rs.13.33 lakhs (Previous Year: Rs. 8.50 lakhs) lying in current accounts, not available for use by the Company.

6. Employee Benefits:

The Company has provided the following benefits to its employees during the year:

I. Defined Contribution Plan – Provident Fund:

During the year, the Company has recognised the employer's contribution to Employees Provident Fund Organisation amounting to Rs.42.95 lakhs (Previous Year: Rs. 27.34 lakhs) as part of Employee Costs in Schedule 17 of the financial statements.

II. State Plans:

a) Employer's contribution to Employees' State Insurance Scheme.

b) Employer's contribution to Employees' Pension Scheme, 1995.

7. Segment Disclosures:

a) Business segments have been identified as per Accounting Standard 17 – 'Segment Reporting' taking into account the product portfolio, internal reports, organisation structure, etc.

b) The Company has considered business segment as the primary segment for the purpose of disclosure.

c) Types of products in each Business Segment:

d) The Segment Revenues, Results, Assets and Liabilities include amounts identifiable to specific segments and amounts allocated to all segments on a reasonable basis.

8. The amount of unclaimed dividends lying in separate bank accounts as at the Balance Sheet date is Rs.13.33 lakhs (Previous Year: Rs. 8.50 lakhs). There is no amount due and outstanding as at the Balance Sheet date to be credited to the Investor Education and Protection Fund.

9. Previous year's figures have been re-grouped/re-classified wherever necessary to conform to classification for the current year.


Mar 31, 2010

1. Particulars of Security provided for the loans are as under: - Term loans from Banks:

a) Term loan of Rs.370 lakhs from Dhanlaxmi Bank Ltd. is secured by hypothecation by way of (1) first charge on the plant and machinery, tools and accessories in respect of specific assets financed by the bank, namely (a) 2 x 230 KW Wind Mills situated at Dharapuram Taluk, Erode, Tamil Nadu; (b) Machinery and equipment in respect of Solar Water Heater Unit at K.G Chavadi, Coimbatore; and (c) Office cum godown building at Mansoorabad Village, Renga Reddy District, Andhra Pradesh and (2) equitable mortgage of 4 acres of land relating to the Wind Mills, at Erode, Tamil Nadu and 2,091.5 sq. meters of land at Mansoorabad Village in Andhra Pradesh.

b) Term loan of Rs.100 lakhs from Dhanlaxmi Bank Ltd. is secured by way of equitable mortgage of 106.424 cents of land at Edappally South Village, Kanayannur Taluk, Vennala Desom, together with godown with an area of 1,578.40 sq. meters.

c) Term loan of Rs.1,000 lakhs from State Bank of India is secured by way of (a) charge over the registered Trade Mark “V-GUARD”; and (b) exclusive charge over (i) Plant and Machinery in the trading division having establishments at Ernakulam, Bangalore, Coimbatore and Hyderabad; (ii) Factory building and plant and machinery at Solar Water Heater Division; (iii) 47.737 cents of land at Sastha Temple Road, Kaloor; (iv) 113.293 cents of land at High School Road, Vennala; (v) 1,306 cents of land at K.G Chavadi, Coimbatore; and (vi) 12.52 cents of land at Mettupalayam Road, Coimbatore.

d) Term loan of Rs.800 lakhs from State Bank of India is secured by way of (a) charge over the assets acquired / constructed out of bank finance, viz., corporate office building at Vennala; (b) extension of equitable mortgage over 47.737 cents of land at Sastha Temple Road, Kaloor, 113.293 cents of land at High School Road, Vennala, 1,306 cents of land at K.G Chavadi, Coimbatore, 12.52 cents of land at Mettupalayam Road, Coimbatore, and (c) extension of charge over Plant and Machinery in Trading Division and Solar Water Heater Division and factory building of Solar Water Heater Division.

e) Term loan of Rs.200 Lakhs from Punjab National Bank is secured by way of hypothecation of 622.50 Cents of land at Survey No.37/2, 37/3 and 37/4 together with godown building at Thenkurissi Village near NH-47 Junction, Palakkad.

Medium term loan from Banks:

Medium term loans from Dhanlaxmi Bank Ltd. and HDFC Bank Ltd. are secured by hypothecation of vehicles financed by the lender.

Medium term loan from Others:

Medium term loan from Cisco Systems Capital India Pvt. Ltd. is secured by hypothecation of fixed assets financed by the lender.

Working capital loan from Banks:

a) Working capital loan from State Bank of India, Dhanlaxmi Bank Ltd, Citibank N.A., HDFC Bank and Standard Chartered Bank are secured by hypothecation by way of pari-passu first charge on all current assets of the Company, both present and future, including stock of goods, book debts and all other movable assets including document of title to goods on pari-passu basis and third pari-passu charge on all fixed assets of the Company including immovable properties.

b) Working capital loan from Punjab National Bank is secured by way of first pari-passu charge on all current assets of the Company, wherever located, or in transit or delivery to the Company including stock of goods, book debts and all other movable assets along with other banks. Balance outstanding in this facility as on 31.03.2010 is Rs. Nil.

2. Company has availed supplier bill-discounting facilities of Rs.500 lakhs from Small Industries Development Bank of India (SIDBI), Rs.1,000 lakhs from State Bank of India, Rs.1,050 lakhs from Standard Chartered Bank and Rs.1,000 lakhs from Dhanlaxmi Bank Ltd. The security details of these facilities are as follows:

a) The limit with SIDBI is secured by a second charge by way of hypothecation of all the movable assets including movable plant, machinery, spares, tools, accessories, equipments, computers etc., both present and future, of the Company and personal guarantee of Shri Kochouseph Chittilappilly, Managing Director of the Company.

b) The limit with State bank of India, Standard Chartered Bank and Dhanlaxmi Bank Ltd. are secured by way of extension of security provided for working capital loans.

3. Contingent liabilities:

(Rs. in lakhs)

Particulars 2009-10 2008-09

a) Sales tax matters under dispute 125.35 97.49

b) Open letters of credit for import purchase 343.72 65.22

4. Estimated amount of contracts remaining to be executed on capital amount and not provided for (net of advances): Rs.343.96 lakhs. (Previous Year: Rs.576.10 lakhs).

5. Notes on Cash Flow Statement:

a) The Cash Flow Statement has been prepared using the ‘indirect method’ specified in Accounting Standard – 3 “Cash Flow Statements” notified in Companies (Accounting Standards) Rules, 2006.

b) Cash and Cash Equivalents includes (a) fixed deposits of Rs.85.25 lakhs (Previous Year: Rs.59.45 lakhs), given as security for guarantee and letter of credit facility extended by State Bank of India and Dhanlaxmi Bank Ltd.; and (b) unclaimed dividend amounting to Rs.8.50 lakhs (Previous Year: Rs.5.36 lakhs), not available for use by the Company.

6. Interest capitalized during the year on funds borrowed for construction of Corporate Office building: Rs. Nil (Previous Year: Rs.36.97 lakhs).

7. Employee Benefits:

The Company has provided the following benefits to its employees during the year:

I. Defined Contribution Plan – Provident Fund:

During the year, the Company has recognised the employer’s contribution to Employees Provident Fund Organisation amounting to Rs.27.34 lakhs (Previous Year: Rs.21.71 lakhs) as part of Employee Costs in Schedule 17 of the financial statements.

II. State Plans:

a) Employer’s contribution to Employees’ State Insurance Scheme.

b) Employer’s contribution to Employees’ Pension Scheme, 1995.

During the year, the Company has recognised the following amounts in the Profit and Loss Account, included as part of Employee Costs in Schedule 17 of the financial statements:

8. Segment Disclosures:

a) Business segments have been identified as per Accounting Standard 17 - Segment Reporting taking into account the product portfolio, internal reports, organisation structure, etc.

b) The Company has considered business segment as the primary segment for the purpose of disclosure.

d) The Segment revenues, results, assets and liabilities include amounts identifiable to specific segment and amounts allocated to that segment on a reasonable basis.

9. Related Party Disclosures:

I. Related party disclosures under Accounting Standard 18: a) Nature of Relationship and Name of Related Parties:

Sl. No. Nature of Relationship Name of Related Party

(i) Key Management Personnel

Mr. Kochouseph Chittilappilly (Managing Director),

Mr. Mithun K. Chittilappilly, (Executive Director),

Mr. N. Sreekumar (Joint Managing Director - From

June 2009 to January 2010)

(ii) Relatives of Key

Ms. Sheela Kochouseph, Mr. Arun K. Chittilappilly,

Management Personnel

Mr. C. T. John - Wife, Son and Brother respectively of Mr. Kochouseph Chittilappilly

(iii) Enterprises in which the Key M/s. Wonderla Holidays Private Limited,

Management Personnel and M/s. V-Star Creations Private Limited his relatives have substantial and M/s. Vintes Solutions Private Limited interest

10. The amount of unclaimed dividends lying in separate bank accounts as at the Balance Sheet date is Rs.8.50 lakhs (Previous Year: Rs.5.36 lakhs). There is no amount due and outstanding as at the Balance Sheet date to be credited to the Investor Education and Protection Fund.

11. Previous year’s figures have been re-grouped / re-classified wherever necessary to conform to classification for the year.

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